ELLSWORTH, Maine — Maine Coast Memorial Hospital has asked a U.S. District Court judge to overturn a ruling that denied a Medicare designation that would have resulted in higher payments to the hospital under the federal program.

The hospital applied in June 2010 to be designated a “Medicare Sole Community Hospital,” a label which indicates a medical facility’s role as the linchpin in providing health care to rural Medicare patients.

According to Maine Coast President and CEO Charlie Therrien, the difference between receiving the designation and not is about $4 million annually.

The designation would require the hospital to show that no more than 25 percent of Medicare beneficiaries in its service area receive inpatient care at “other like hospitals” within a 35 mile radius.

Maine Coast claims that only 21 percent of eligible patients receive care at similar facilities — Eastern Maine Medical Center and Saint Joseph Hospital in Bangor. But the federal government, in reviewing the data, found that nearly 28 percent of Medicare patients sought care elsewhere, and denied the sole community hospital status.

The hospital claims the feds got their numbers wrong, and on April 16 filed a civil complaint against Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services, in U.S. District Court in an effort to overturn the ruling.

“The secretary’s decision was arbitrary, capricious, an abuse of discretion and otherwise not in accordance with law generally, as well as the plan and unambiguous language [of applicable federal law] read as a whole,” the complaint states.

The arithmetic involved here is actually pretty simple: It’s division. The number of Medicare patients in the hospital’s service area who went to similar hospitals is divided by the number of Medicare patients in the service area who received treatment at any hospital within the 35 mile radius.

The two sides agree on the numerator: In a yearlong sample of patient visits, 459 Medicare patients received care at other “like hospitals” within the 35 mile radius.

The dispute is whether that second figure, the denominator, should comprise only the patients who sought care at Maine Coast and the other two “like hospitals,” or all beneficiaries in the service area who were hospitalized for inpatient care anywhere within the 35 mile radius.

Maine Coast said that because it has fewer than 50 beds, federal law allows it to adjust the numbers to account for the number of patients forced to seek specialized care at facilities other than itself and “like hospitals” — Blue Hill Memorial Hospital, Mount Desert Island Hospital, Acadia Hospital and Dorothea Dix Psychiatric Hospital.

It says the number of beneficiaries is 2,173. So, 459 divided by 2,173 yields a figure of about 21 percent of Medicare patients who sought care elsewhere. That would make Maine Coast eligible for sole community hospital status — and the $4 million in increased Medicare reimbursements.

DHHS claims the number should actually be 1,643 patients, the number of beneficiaries who received care at Maine Coast or one of the two like hospitals. With that figure in place, the percentage of patients who went to hospitals other than Maine Coast exceeds 25 percent, making the hospital ineligible for sole provider status.

“This case is about how to properly interpret the regulation they’ve created. We had different interpretations of the words, and we’re asking the court to tell us whose interpretation is correct” said William Stiles of the law firm Verrill Dana in Portland. He’s representing Maine Coast along with attorney Benjamin Ford.

U.S. District Judge Nancy Torreson is presiding over the case. Evan Roth, civil chief for the U.S. Attorney’s Office in Portland, said the case would be handled by DHHS attorneys in Boston or Washington, D.C.

No one from the department has filed a formal response to the complaint, and efforts to obtain a comment from the defense were unsuccessful on Tuesday.